What is benchmarking?
Benchmarking Salary involves comparing salary rates for similar positions advertised by external organizations. Managers of human resources and recruitment managers can consider several factors to consider precise salary data on the market. Factors that can affect payments rates include geographical location, experience, level of education, work obligations, organization size and financial resources. Other factors that could be included in determining the position for the position include the power of the company's benefits and its total reward system. For example, a company trying to occupy the position of a customer service representative could decide on a salary range between $ 25,000 and $ 35,000 in the US (USD) per year. In order to come up with this scope, the department of human resources will perform a benchmarking of the salary. One of the methods that companies use to compare salary rates is to compare the amount offered by other companies in positions with the same title and work duties.
Large organizations can use external companies or online tools to carry out salary benchmarking. With some of these tools, recruitment manager can find aggregated market data for a particular geographical location, title or work at work. When conducting research, the company can also obtain market wage rates that take into account the differences in education and the level of experience. For example, some companies pay employees a higher salary in basic positions if they have a bachelor's degree or a certain amount of experience.
Precise Benchmarking Attempts to Localize Sales Structures on the market for positions that are similar in terms of work obligations. It can be misleading since comparing the working titles, the actual scope of work performed in the position will often be used to determine the salary range. For example, the obligations of positions with the title of "sales representative" can vary very much. Some sales representatives withThey focus on account maintenance and customer service for established clients, while others spend most of their days scouting for new business and providing product presentations.
In some cases, salary benchmarking is also considering organizing the organization to provide comprehensive benefits or package Total Rewards. For example, some employers cover full employee insurance costs for a slightly lower salary. Other large organizations may include benefits, such as stocks, corresponding contributions for pension plan or annual performance bonuses. Most companies use salary market data to remain competitive, reduce turnover and hire the best possible talent.